Nyambirai disposes of US$3,1m Econet stake

Lifestyle Holdings CEO Tawanda Nyambirai is reported to have disposed of more than US$3,1 million worth of Econet shares over the past week, possibly to bolster his furniture manufacturing and retail concern, following its demerger from the TN group of mainly financial institutions.
Report by Fidelity Mhlanga

Close to one million Econet shares have exchanged hands in tranches that gradually peaked in the week to November 30. Market sources say Nyambirai, who is also Econet’s chairman, was the seller of the shares.

Nyambirai neither confirmed nor denied offloading the shares, saying his group’s investment portfolio was handled by TN Asset Management company and therefore he would not be aware if any sales had been transacted.

“I wouldn’t know offhand. We have an asset management firm that handles such issues on behalf of clients,” said Nyambirai in a telephone interview on Wednesday.

However, informed sources maintain the Lifestyle Holdings CEO is the one who has offloaded the shares. Whilst the reasons for the move are not clear, market speculation is that the disposals are meant to fund Lifestyle Holdings cashflows, following its separation with TN Bank.

This move also comes in the wake of reports that Econet Wireless has moved to assume control of TN Bank following a rigorous separation exercise of the bank and Lifestyle Holdings.

According to well-placed sources, the changes are happening at shareholder level. Already some of the senior employees at Econet, who include finance director Kris Chirairo, have been delegated to the bank’s offices.

Well-placed sources say Econet will most likely emerge with over 80% shareholding in the bank after taking over interests presently held by Nyambirai.

Since TN’s listing most analysts have questioned whether Econet brought in new money into the bank or it was simply ‘squaring off’ old deals that had been transacted between the two companies.

TN Asset Management is in the process of being absorbed by the bank. The first transaction involved just the bank while the other financial services were at the holdings level. Sources say the consolidation will be complete by year end.

Lifestyle Holdings’ offices have already relocated to the industrial sites, from 101 Union Ave building in the city centre.

The injection was supposed to meet the working capital requirements of the holdings company while in turn the financial resources available to the bank post the demerger and recapitalisation would be sufficient to cover operational requirements.

The plan is to make TN Bank one of the top four banks in the country. TN Holdings became a stand-alone company and subsequently changed its name to Lifestyle Holdings.

TN Bank was demerged from the holdings company through the issuance of 76,2 million TN Bank shares at a subscription price of US$0.0000001 per share at an allotment ratio of one TN Bank share for every 10 TN Holdings limited ordinary shares held. The 30,3 million ordinary shares held by TN Financial Holdings were converted into 3,03% non-cumulative preference shares with a nominal value of US$1 per share.

Before the demerger of the bank from TN Holdings, Nyambirai, through various investment trusts, owned the majority stake in the bank.